Gartner and Financial Executives Research Foundation Survey Shows That Only 5 Per Cent of CIOs Can Authorise IT Investments Alone

Stamford, Conn., July 6, 2011 — CFO’s influence in IT is growing as CFOs alone have authorised 26 per cent of all IT investments, while CIOs alone have authorised only 5 percent of IT investments, according to a recent joint study by Gartner, Inc., Financial Executives Research Foundation (FERF) and the Committee of Finance & IT (CFIT) of Financial Executives International (FEI). The survey also showed that 42 per cent of IT organisations report directly to the CFO, and 33 per cent of IT organisations are reporting to the CEO.

The survey of CFOs, which is in its third year, is designed to gather perceptions from financial executives about technology, key trends and planned improvements to operations. The Gartner/FERF technology study, conducted from October 2010 through January 2011, included 344 respondents who were qualified in providing a perspective on technology deployment within the organisation. Sixty-six per cent of the respondents were CFOs, 9 per cent were business unit CFOs, and 95 per cent could be considered senior financial executives.

The survey results varied by the size of the company. For example, in companies with less than $50 million in revenue, 47 per cent of IT departments report to the CFO. Fifty-eight per cent of companies with revenue of more than $50 million and less than $250 million have IT departments that report to the CFO, while 46 per cent of companies with $1 billion or more in revenue have IT reporting to the CFO.

"This high level of reporting to the CFO, as well as their influence in technology investments, demonstrates the need for companies to ensure that their CFO is educated on technology, and underscores just how critical it is that the CIO and CFO have a common understanding on how to leverage organisation technology," said John Van Decker, research vice president at Gartner.

"This year's results show an increasing enterprise requirement for greater financial control of technology initiatives in the firm, as well as better alignment between the technology and the strategic direction of the organisation, with the CFO primarily leading this coordination," said Bill Sinnett, director of research at FERF.

Senior financial executives were asked how to ensure that the relationship between the business and IT is successful and effective. The responses pointed to a clear ownership of the project (38 per cent), the business case for the project (37 per cent) and the project management (36 per cent). Business partnering and sound project management continue to have more of an impact on IT investment success than technology prowess.

The survey also showed that senior financial executives expect IT spending to recover conservatively in 2011, with 38 per cent of respondents saying that they do not expect this growth to reach the level experienced before the recession in 2008. Forty per cent see the level of growth consistent with 2010; just 6 per cent expect the economy to rebound this year beyond 2008 levels.

When it comes to how CFOs are making IT investments, and which guidelines they used to guide investments, 72 per cent of firms said that they will invest where they see a competitive advantage driven by IT. Business intelligence (BI) is the top technology initiative from the perspective of the senior financial executive. For a combined 65 per cent of choices, BI ranked as the technology with the highest demand, while 46 per cent ranked enterprise business applications, such as enterprise resource planning (ERP) and integrated financial management solutions, as investment priorities. When viewed within the larger scope of operations' infrastructure, however, business applications (30 per cent) were seen as more important than BI (23 per cent) in 2011.

Of all organisations in the study, 41 per cent believed that IT is appropriately funded for 2011, and 31 per cent said that IT has the technological capability to move the firm forward. However, only 30 per cent said that IT truly fulfils its mission, meaning that 70 per cent do not believe that IT is providing business benefits. Furthermore, only 32 per cent of CFOs said they see the CIO as a strategic partner.

Only 47 per cent of survey respondents viewed IT as being strategic, while 28 per cent said IT fulfils what is asked of it. Thirty-five per cent of organisations see IT as being a strategic driver of business performance; 8 per cent view IT as a key contributor to the organisation's competitive position; and 4 per cent see it as transformational.

"In terms of enterprise technology, organisations need to focus on better enabling business processes, led by technology initiatives," said Mr Sinnett. "Given some of this dissatisfaction, CFOs are taking a more active role in controlling a greater share of the organisation's IT investments. Due to the increased involvement of CFOs and senior financial executives, organisations must make it a priority to better educate decision makers."

"IT organisations must understand the CFO's views of technology investment decisions and must work toward developing a relationship with the CFO that resembles a business partnership," said Mr Van Decker. "This will enable the business to become more agile. This flexibility will help organisations select best practices that could make business processes work better, thereby providing better business insight."

Additional information is available in the Gartner report "CFOs' Priorities for Technology Identified in the 2011 Gartner FEI Technology Study." This research provides the CFOs' perspectives on technology deployment in the enterprise, including current issues with opportunities. The report is available at gartner.com/resId=1718414

Mr Van Decker and Mr Sinnett provide additional commentary in the Gartner on Demand webinar "Exploring CFO Priorities for 2011." They discuss the top findings from this year's survey. The webinar is available at my.gartner.com/portal/server.pt?open=512&objID=202&mode=2&PageID=5553&resId=1663714&ref=Webinar-Calendar

About FERF
Financial Executives Research Foundation (FERF) is the non-profit 501(c)(3) research affiliate of Financial Executives International (FEI). Since 1944, FERF has been dedicated to identifying, developing and providing practical content through objective research to FEI members. FERF focuses on member-driven initiatives, making decisions on research topic areas based upon members' interests and needs. Examples of the topics covered in FERF publications and articles include IFRS, financial reporting and compliance, technology advances, benchmarking, audit fees, finance function structure and costs, sourcing, compensation, risk management and internal control.

About Gartner
Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is a valuable partner to 60,000 clients in 11,500 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,500 associates, including 1,250 research analysts and consultants, and clients in 85 countries. For more information, visit gartner.com

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